Crude Oil Price Update – Trader Reaction to $74.54 Sets the Early Tone on Friday

U.S. West Texas Intermediate crude oil futures are trading nearly flat into the close on Thursday after posting a volatile reaction to the upside earlier in the session. The intraday short-covering rally was fueled by reports China was prepared to buy more oil and other energy supplies to meet growing demand. Gains were capped, however, by the strong U.S. Dollar and the unexpected rise in U.S. crude inventories.

At 20:16 GMT, December WTI crude oil futures are trading $74.75, up $0.25 or +0.34%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on September 28. A trade through $76.26 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through $69.05.

The minor trend is also up. A trade through $72.82 will change the minor trend to down. This will confirm the shift in momentum.

The minor range is $76.26 to $72.82. December WTI crude oil futures are currently straddling its pivot at $74.54.

The short-term range is $69.05 to $76.26. Its retracement zone at $72.66 to $71.80 is potential support. Thursday’s low at $72.82 stopped just short of this zone.

Daily Swing Chart Technical Forecast

The direction of the December WTI crude oil futures contract into the close on Thursday is likely to be determined by trader reaction to $74.54.

Bullish Scenario

A sustained move over $74.54 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the main top at $76.26.

Bearish Scenario

A sustained move under $74.54 will signal the presence of sellers. If this move generates enough downside momentum then look for a possible test of the retracement zone at $72.66 to $71.80.